How to calculate your car insurance premiums.
Comparing a lot of car insurance quotes side by side can take a long time.
A car insurance calculator might be a quick shortcut, but unfortunately might not be too much help.
- Can I use a car insurance calculator? Unfortunately, a car insurance calculator won’t tell you exactly how much it will cost, because there are too many factors involved. You might use a “calculator” provided by insurer, but this is basically just the same thing as getting a quote.
- Can I use a car insurance estimator? If you think you’re paying too much for car insurance you can estimate your own premiums, based on your circumstances and the average cost of car insurance in Australia.
The most accurate way to compare car insurance is generally to get quotes, and then compare them side by side. The fastest way of doing this might be to simply get quotes individually from each insurer.
After you do, there a few things to watch out for, to make sure you’re comparing them accurately.
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How to compare car insurance quotes
Ever wondered why quotes for similar cover might be very different from one another? You might not be comparing equivalent prices.
- Does the quote include discounts? The quote you’re given will often be the lowest possible price. For example, sometimes it might include a hefty 25% car insurance discount for buying online, while another insurer might offer the same discount, but not include it in the quoted price.
- How much information did you provide before getting a quote? If you simply provided your car make and model for a quote, but haven’t yet given your age, address and other information, the quote might not be your “final price.” Generally, the more information you’ve provided, the more accurate your quote will be.
- Is the cover equivalent? Even two comprehensive policies might be very different, which can lead to significant price differences.
- Do you need a special type of car insurance? Driving for business, carrying passengers for pay, adding a lay-up period and other variations can all change premiums a lot.
Steps to follow when comparing car insurance quotes
The first step is to work out whether you want or need special cover, to make sure you’re comparing the right policies and won’t be paying too much for car insurance.
- Pay as you drive car insurance - Affordable car insurance for those who drive short distances each year
- Business use car insurance - Car insurance for people who use the same vehicle for personal and business use
- Business only car insurance - Commercial car insurance for business use only
- Truck insurance - Insurance for trucks, generally refers to vehicles of 2 tonne GVM or more.
- Motorcycle insurance - Insurance for vehicles on two wheels
After you get a quote:
- Consider how much information you’ve provided for an understanding of how accurate the quote is. If you know the factors that affect the cost of car insurance you can guess whether it might be too high or too low.
- Consider whether the quote also includes any discounts, or other factors that may affect the final price.
- Look at the different cover elements side by side, and see whether that accounts for the price difference.
- Rule out the prices that are too high, or the cover that doesn’t work for you, and create a shortlist.
- Get detailed quotes from your shortlist of providers and take out cover online for more discounts.
The wide range of factors that affects car insurance prices means a quote might not be finalised or accurate until you provide all the details and choose your cover. These variations mean a car insurance calculator will typically not be very accurate.
Variations to consider
Until you decide on the following, your car insurance costs might change.
- What type of car insurance you’re taking out, and whether it’s comprehensive, third party only, or third party with fire and theft cover.
- Agreed value or market value
- Whether you’ll be getting any optional extras
- Whether you’re entitled to any multi-policy discounts, online discounts or other savings
- If you can pay less thanks to car security systems, or because you park it in a secure garage
- If you’ve provided your age, postcode and make and model of car
- Whether or not you’ve specified any applicable business use
- Whether or not you’ll be restricting or nominating drivers, where applicable
When you compare car insurance quotes, one insurer might draw you in with the cheapest prices, only for them to go up as you provide more information and make more cover decisions.
Another might do it the other way around, and start with a higher quote that gets cheaper as you make more cover decisions.
There probably isn’t a quick and accurate car insurance calculator that can help you with all the calculations you need to do. So instead it might be worth taking your time, shopping around carefully and getting multiple detailed quotes, to make sure you’re comparing equivalent cover types and looking at accurate prices.